EMV ‘Quick Chip’ Gets a Chance to Sway Merchants

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Visa announced Quick Chip four months ago, but until today the card brand has not had a place to showcase its faster EMV technology to merchants who feel burdened by the EMV payment process.

With the New Leaf grocery store chain in the San Francisco area becoming the first retailer in the U.S. to use Quick Chip, as well as Mastercard's version called M/Chip Fast, Visa says it now has the perfect example for acquirers and processors to follow.

"What we see now is a rapid development time and a go-live time in moving to Quick Chip," said Stephanie Ericksen, vice president of risk products at Visa Inc. "This is encouraging news that we now can go straight to Quick Chip, and are showing how well it works."

The example of how the card brands and Index, a San Francisco-based payments gateway and technology provider, were able to set up a New Leaf store in just a few weeks is coming at a good time.

Quick Chip has started slowly, in part because merchant acquirers are still trying to wrap their arms around regular EMV deployment. "A lot of players in the industry have already been working on the full EMV implementation and many were right in the middle of that [when Quick Chip was introduced]," Ericksen said. "Many had to finish those before starting on Quick Chip."

Index knows from experience how that works. The company had completed a full EMV implementation at one of New Leaf's seven stores just weeks before upgrading it to Quick Chip.

"The other stores are going straight to Quick Chip," said Joe Koenig, partner technology manager at Index.

While it is not a major learning curve for consumers to switch from waiting 10 or more seconds to less than three seconds for a card reader to authorize a chip card and create a cryptogram, it does help merchants with staff training if they can just go straight to Quick Chip now, Koenig said.

It also helped Index that the New Leaf chain uses Toshiba Ace POS and Verifone PIN pad hardware, two products the Index software integrates into quickly, Koenig added.

The initial launch of Quick Chip, a free upgrade for processors and acquirers, should be welcome news to an industry that has faced plenty of challenges with EMV implementation, said Thad Peterson, senior analyst with Boston-based Aite Group.

"The latency of the transaction at the point of sale was raising a real concern about the value of the transaction in the minds of consumers and merchants," Peterson said.

Because Quick Chip converts an EMV transaction experience to one similar to swiping a mag-stripe card, everyone involved should find it more appealing, Peterson said.

"From that perspective alone, it's a major enhancement," he added. ""The process can also accelerate implementation of EMV with merchants who have yet to do so, and that will also be a real benefit."

Quick Chip has the potential to carry such an impact, if other merchants have the same experience as New Leaf. "The upgrade to Quick Chip was fairly invisible from our perspective," Brendan Lazarus, IT manager for New Leaf Community Markets, said in a statement through Visa. "Once we decided to move forward, working with Index, the process moved quickly."

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